There’s Always A Reason To Get Out Of The Market
Fear incites human action far more urgently than does the impressive weight of historical evidence.
– Jeremy Siegel
Newspapers, social media, and news outlets bombard us with negative headlines every day.
Our brains can’t get enough of it.
Listening to bad news has saved the human race for centuries.
Watch out for that lion! Watch out for that plague!
This is a big reason why we listen so attentively to those who say the stock market will crash any day now.
This fear response has lifted some financial “gurus/social influencers” to the spotlight. One of these well-known doomsayers is Robert Kiyosaki.
Robert Kiyosaki is a household name in personal finance. He wrote the great book Rich Dad, Poor Dad; which advocates for financial literacy. His books have helped many to feel empowered to take action regarding their financial situation.
However, his persona in the digital world is very different.
Here’s a tweet from Robert in 2023:
He likely instilled fear in his millions of followers, which likely prompted some to withdraw money from the stock market because they believed Robert knew something they didn’t.
The stock market is up 33% since he tweeted this out.
You would think he’s looking out for his followers, but he’s been making these claims for years and the stock market has continued to rise.
Each of these boxes represents when he was calling for a crash:
April 7, 2011: “The crashing is not over”
May 23, 2015: “Cash in on the crash”
August 7, 2018: “Author Robert Kiyosaki warns biggest crash is coming”
October 28, 2020: “The EVERYTHING CRASH is coming”
July 2021: “Giant stock market crash coming October”
During this timeframe, the stock market was up almost 280%.
At this point, Robert has become less of a financial prophet and more of a fortune teller – making vague predictions and conveniently never admitting when he was wrong.
A dear friend sent me something similar about a gentleman named Jim Rickards.
My friend told me how convincing Jim sounded about an imminent stock market crash.
I did a quick Google search, and it turns out – like Robert Kiyosaki - Jim has been predicting a crash for years:
These people could be right eventually, but a broken clock is right twice a day, too.
Jason Zweig – writer for the Wall Street Journal - once said:
Tell the truth to those who want the truth, and you’ll make a living.
Lie to people who want to be lied to, and you’ll get rich.
Tell the truth to those who want to be lied to, and you’ll go broke.
The truth is investing in stocks is more volatile than holding cash.
But remember, since 1929, the stock market has been positive almost 75% annually (or 3 out of every 4 years).
Over decades, stocks have helped compound wealth while cash’s power is eaten up by inflation.
It’s risky not to take enough risk.
– Magnus Carlsen (chess Grand Master)
There will always be a reason not to invest. I list 99 of them below:
Despite the above events, the market has continued to rise over time.
Fear will always have a megaphone, but history whispers a different story – one that rewards staying the course.
Remember, over the long-term, the market rewards patience, not panic.
Now here’s what I’ve been reading and watching lately:
The story of Jim Simons (the man who generated 66% annualized returns) on Founders Podcast
The story of Adidas on Founders Podcast
All the different ways your life could have turned out by Morgan Housel
How To Know A Person by David Brooks
One of favorite children’s book (I have a 5-year old): Maybe by Kobi Yamada
Here’s some of my latest writing:
